United States District Court, District of Columbia
R. ALEXANDER ACOSTA, U.S. Secretary of Labor, Plaintiff,
RANDALL ARLETT, et al. Defendants.
MEMORANDUM OPINION RE DOCUMENT NO. 12
RUDOLPH CONTRERAS UNITED STATES DISTRICT JUDGE.
Plaintiff's Motion for Default Judgment
Alexander Acosta, the United States Secretary of Labor, filed
suit against Defendants Randall Arlett; American Hospital
Management Company, LLC (“AHM”); and American
Hospital Management Company 401(k) Profit Sharing Plan (the
“Plan”) for failure to remit employee participant
contributions to the Plan and for remitting certain
contributions late, in violation of multiple provisions of
the Employee Retirement Income Security Act of 1974
(“ERISA”). See Compl., ECF No. 1.
Defendants have failed to respond to this action. Now before
the Court is Secretary Acosta's motion for default
judgment, which asks the Court to enter judgment for $128,
317.96 in damages and requests various equitable remedies.
See id. ¶¶ 6-8; Pl.'s Mem. Supp. Mot.
Def. J. (“Pl.'s Mem”) at 8-12, ECF No. 12-2.
For the reasons set forth below, the Court grants Secretary
Arlett and AHM are fiduciaries of the Plan as those terms are
defined under ERISA. See Compl. ¶¶ 6-7
(citing 29 U.S.C. § 1002(21)). Mr. Arlett and AHM
established the Plan to provide retirement benefits to
AHM's participating employees. See Declaration
of William Jurgovan (“Jurgovan Decl.”) ¶ 3,
Ex. A, ECF No. 12-2. The Plan allowed participants to
contribute a portion of their pay to the Plan as elective
salary deferrals, or employee contributions, through payroll
deductions. Compl. ¶ 9.
December 29, 2017, Secretary Acosta filed suit alleging that
Defendants had failed to remit employee contributions and had
remitted certain contributions late without interest from
September 2012 to September 2015. Id. ¶ 10.
Secretary Acosta also alleges that, since April 2016,
Defendants have neglected their fiduciary duty to administer
the Plan and its assets, failed to respond to requests of
former employees to distribute the Plan's assets, and
failed to make reasonable efforts to remedy their fiduciary
breaches. Id. ¶¶ 13-18. Secretary Acosta
asks the Court to award damages in the amount of $128, 317.96
for unremitted contributions and interest owed on unpaid and
late contributions. Id. ¶ 21; Pl.'s Mem. At
2. He also seeks various equitable remedies. Compl. ¶
Acosta served all Defendants with the complaint and summons,
but neither Defendant responded or otherwise defended this
action. See Return of Service, ECF No. 4, 8.
Accordingly, Secretary Acosta asked the Clerk of Court to
enter default against all Defendants. See Request to
Enter Default on Def. Arlett, ECF No. 5.; Request to Enter
Default on Defs. AHM and the Plan, ECF No. 9. The Clerk of
Court entered default against all Defendants, and Secretary
Acosta now moves for default judgment. See Arlett
Default, ECF No. 7; AHM & Plan Default, ECF No. 10;
Pl.'s Mot. Default J., ECF No. 12. The Court now
addresses Secretary Acosta's motion and concludes that he
is entitled to a monetary judgment of $128, 317.96 and to
most of his requests for equitable relief.
courts prefer to resolve disputes on their merits, a default
judgment is appropriate when the adversarial process has been
effectively halted by a party's failure to respond.
Jackson v. Beech, 636 F.2d 831, 836 (D.C. Cir.
1980). Federal Rule of Civil Procedure 55 sets forth a
two-step process for the entry of a default judgment. First,
the clerk of the court must enter default. See Fed.
R. Civ. P. 55(b)(2). Following the clerk's entry of
default, the plaintiff may move for a default judgment.
Id. When ruling on such a motion, a defendant's
liability for the well-pleaded allegations of the complaint
is established by the default. See Adkins v. Teseo,
180 F.Supp.2d 15, 17 (D.D.C. 2001). Default does not,
however, establish the amount of damages owed. See
Id. Instead, the court must ascertain the sum to be
awarded, which may be based on the plaintiff's affidavits
and other documentary evidence. See Nat'l Shopmen
Pension Fund v. Russell, 283 F.R.D. 16, 19-20 (D.D.C.
2012). A court has “considerable latitude in
determining the amount of damages.” Ventura v. L.A.
Howard Constr. Co., 134 F.Supp.3d 99, 103 (D.D.C. 2015).
In ERISA actions involving delinquent employee contributions,
plaintiffs may recover damages for: (1) the unpaid
contributions, see 29 U.S.C. § 1132(g)(2)(A);
(2) interest on those unpaid contributions, id.
§ 1132(g)(2)(B); (3) an amount equal to the greater of
(i) interest on the unpaid contributions or (ii) liquidated
damages provided for under the plan, which must not exceed 20
percent of the unpaid contributions, id. §
1132(g)(2)(C); (4) reasonable attorneys' fees and costs,
id. § 1132(g)(2)(D); and (5) other legal or
equitable relief the court deems appropriate, id.
Court first addresses Defendants' liability in the
present action. Secretary Acosta filed his complaint on
December 29, 2017. See Compl., ECF No. 1. He then
served Mr. Arlett on February 10, 2018, and served AHM and
the Plan on March 9, 2018. See Return of Service,
ECF Nos. 4, 8. On March 12, 2018, Secretary Acosta requested
an entry of default on Mr. Arlett on the ground that he had
not timely filed an answer to the complaint. See
Request to Enter Default on Def. Arlett, ECF No. 5. The Clerk
of Court thereby entered the default on March 13, 2018.
See Arlett Default, ECF No. 7. Secretary
Acosta subsequently requested a default entry on both AHM and
the Plan on the same grounds, see Request to Enter
Default on Defs. AHM and the Plan, ECF No. 9, and the Clerk
of Court entered the default on April 6, 2018. See
AHM & Plan Default, ECF No. 10. On June 8, 2018,
Secretary Acosta moved for default judgment, and sent
Defendants copies of the motion by first class mail.
See Pl.'s Mot. Default J., ECF No. 12;
Certificate of Service, ECF No. 12-3. To date, Defendants
have not filed an answer, moved to vacate the default
entries, opposed the motion, or otherwise defended this
are liable for the well-pleaded allegations in Secretary
Acosta's complaint because the Clerk has entered default.
See Flynn v. Mastro Masonry Contractors, 237
F.Supp.2d 66, 69 (D.D.C. 2002) (asserting that default entry
establishes liability for every well-pleaded allegation in
the complaint). “ERISA requires that ‘[e]very
employer who is obligated to make contributions to a
multiemployer plan . . . make such contributions in
accordance with the terms and conditions of such plan or such
agreement.'” Flynn v. Extreme Granite,
Inc., 671 F.Supp.2d 157, 161 (D.D.C. 2009) (quoting 29
U.S.C. § 1145) (alteration in original). Secretary
Acosta alleges that Mr. Arlett and AHM breached their
fiduciary duties because they “deducted money from the
participants' pay as employee contributions to the Plan,
” but “failed to remit those contributions to the
Plan, ” and remitted certain contributions late without
interest. Compl. ¶ 10. Further, Secretary Acosta
contends that, despite a former employee's requests ...